The goal is never to sell to a customer one time. You want customers who consistently come back to purchase again and again. Those are the customers that really move the needle for your brand. This is why understanding customer lifetime value (LTV) is so important.
By taking steps to increase customer lifetime value, you can afford to be more aggressive in marketing, knowing customers will spend more over the course of their lifecycle. According to customer retention statistics, customers with a high LTV are better brand advocates as well.
We’ll walk you through how to increase customer lifetime value below, from tips on personalizing experiences to improving support and more. But of all the strategies to increase customer lifetime value, building and optimizing a Shopify loyalty program is the most powerful.
Rivo makes it easy to create an on-brand loyalty program in minutes. More than 7,000 Shopify brands use Rivo, and some are seeing up to a 52x return on investment with a 3.1x repeat purchase rate. Take the next step towards increasing LTV today!
“Fast response/help time with customer/app support. Easy to navigate, offering everything I needed to reward our online customers for their loyalty.” - Mix Beauty Lab
“We were hesitating between 2 other software and Rivo for our referral program. We decided to launch with Rivo and I’m so glad we did. It has a lot of customisability and features and is SUPER easy for a non-technical team to set up.” - Nordivie
“Loads of features, intuitive setup, and excellent support... and all at a very affordable price.” - True Potential Health Services
What is Customer Lifetime Value (LTV)?
Customer Lifetime Value tells you how much total revenue a single customer generates throughout their relationship with your brand. It’s one of the most important profitability metrics in eCommerce because it reveals how valuable your existing customers truly are, not just on their first purchase but over months or years of engagement.
LTV combines three data points: average order value, purchase frequency, and customer lifespan. You’ll multiply those to see the total worth of a customer to your business. For example, let’s say your average customer spends $80 per order, shops four times a year, and stays loyal for three years. Their LTV is $960.
This matters because a higher LTV means your marketing dollars go further. It’s far more profitable to retain a loyal customer who continues to buy than to constantly acquire new ones. Let’s take a closer look at why it’s worth implementing strategies to increase customer lifetime value below.
Why You Should Work to Increase Customer Lifetime Value
Every eCommerce brand wants growth, but the fastest path isn’t through endless new customer acquisition. That’s an endless cycle where you’re just trying to outpace churn. On the other hand, increasing LTV means every customer you acquire continues to generate profit over time.
Lower Marketing Spend and Higher ROI
A higher LTV means you’re less reliant on new customers - more specifically, you don’t need to stress about your marketing dollars churning a profit from the very first order. You can be more aggressive in how you spend.
But a lot of brands with a healthy LTV find that they’re able to actually lower marketing spend. Instead of pouring budget into ads to attract new shoppers, they nurture existing customers who already know and trust the brand.
These customers convert faster, spend more, and respond better to loyalty incentives. That means higher returns from the same marketing investment and a clearer path to profitability without inflating CAC (Customer Acquisition Cost).
Better Profit Margins
Returning customers don’t need promotions or discounts to convert. They already value your products and service. Each repeat purchase carries a higher profit margin since acquisition costs are front-loaded in the first transaction. Even small boosts in repeat purchase rate can dramatically improve overall margins over time.
Stronger Brand Advocacy
Loyal customers don’t just buy more - they tell others about your brand, too! Word-of-mouth and referral marketing are powerful because they carry trust that paid ads could never replicate.
A strong LTV strategy turns satisfied customers into brand advocates who organically expand your reach and influence. So, how do you go about increasing LTV? Figuring out how to increase customer lifetime value starts with understanding where you’re at right now.
Steps to Estimate Your Current LTV
There are three key data points you’ll need to pull from Shopify or your analytics platform:
- Average Order Value (AOV): Total revenue ÷ total number of orders.
- Purchase Frequency (PF): Total orders ÷ total unique customers.
- Customer Lifespan (CL): The average length of time a customer continues to purchase.
Then just apply the standard formula below:
LTV = AOV x PF x CL
This gives a baseline estimate of how much revenue one customer contributes over their relationship with your brand. You can replace PF and CL with average monthly revenue x average retention period for subscription or membership models.
You can get as granular as you want with this LTV calculation. Look into loyalty segmentation, and figure out which tier is providing the best value for your brand. You can also segment by acquisition channel. One thing we’ve found a lot of Shopify brands realize, though, is that their highest-value customers come from referrals or loyalty members.
That being said, let’s get into how to increase customer lifetime value below.
How to Increase Customer Lifetime Value
Knowing the equation for LTV, you can see that there are really only a few ways to increase it - you can raise AOV, purchase frequency rate, or customer lifespan. Ideally, you’d work towards increasing all three of these things.
Of course, you can raise purchase prices as well - but without increasing value, it’s hard to justify price hikes. Here are some tips on how to increase customer lifetime value depending on the metric you want to move:
- Increasing AOV: Offer smart upsells and cross-sells that complement what the customer is already buying. Bundling related products, offering tiered discounts (like “spend $100, get $15 off”), or adding loyalty-based incentives for larger orders can all push customers slightly higher without scaring them away.
- Increasing repeat purchase rate: Send reorder reminders when products typically run out, recommend items based on previous purchases, and use your loyalty program to reward repeat behavior. Personalized thank-you messages or small surprise rewards after the second or third order also help.
- Increasing customer lifespan: Provide ongoing value through exclusive member perks, early access to launches, and consistent (and personalized) communication. Track engagement signals, like declining purchase frequency or inactive reward accounts, and initiate “win-back” campaigns for these customers before they churn.
Let’s take a closer look at some effective strategies to increase customer lifetime value below for Shopify brands specifically.
Strategies to Increase Customer Lifetime Value for Shopify Brands
The strategies to increase customer lifetime value are actually pretty simple. Build trust, offer an amazing product, and continue to engage customers after their first purchase. That’s why the best way to increase LTV is through a loyalty/membership program.
Implement a Loyalty or Membership Program
A loyalty or membership program gives customers a reason to keep coming back - either with points, perks, or exclusive benefits. However the program is structured, the goal is to make staying loyal more valuable than shopping elsewhere.
Rivo offers a platform tailored for Shopify brands. It connects directly to your storefront to pull in all your customer data so you can segment with precision and offer the most personalized experiences possible. Data flows seamlessly across your storefront, email, and marketing channels.
You can get set up in minutes, not weeks, no matter your technical expertise. It’s all plug and play, and you can make sure the loyalty experience is entirely on-brand for your customers. You can create tiered programs, reward for more than just purchases (like reviews or referrals), and personalize rewards using real-time customer data.
Whether you choose to create a typical loyalty program or a Shopify Plus membership program, Rivo moves the needle. Just take a look at some of the case studies from industry-leading Shopify brands:
- Hexclad earned $450k in the first 90 days of launching
- Fresh Chile Co. saw a 156% increase in AOV for members
- Ultra Football brought in $800k in loyalty revenue in less than 6 months
- Rareform grew 30-day repurchase rate by nearly 27%
There’s plenty more success stories where those came from, too.
Actually launching a loyalty program is simple. Start small by rewarding actions customers already take, such as signing up for an account or completing a second purchase.
You can introduce tiers that reflect customer loyalty milestones as your program matures, and use Rivo’s analytics to fine-tune which rewards actually drive repeat business.
Personalize Customer Experiences
One of the most powerful ways to raise loyalty program ROI, and in turn, increase customer lifetime value, is personalizing every touch point customers have with your brand. After all, customers who receive personalized experiences are 60% more likely to become repeat buyers.
Use Shopify data to tailor rewards, recommendations, and messages based on behavior rather than assumptions. For example, reward points for categories each customer shops most, or send curated product suggestions tied to purchase history.
Improve Post-Purchase Engagement
LTV grows fastest when engagement doesn’t stop after checkout. This is a powerful opportunity to check in with customers and make sure they’re enjoying their purchase. You can ask them to leave a review, and incentivize them to do so with a discount on their next order.
You can also send tailored post-purchase emails showcasing complementary products, invite customers to join your loyalty program, or share user-generated content from other members. Shopify merchants can automate these flows through Rivo integrations with Klaviyo or Attentive.
Strengthen Customer Support
Customer support is where loyalty is either solidified or lost. Statistics show that 96% of customers say service impacts their loyalty to a brand.
Quick, empathetic responses turn frustration into trust. Equip your support team with purchase and loyalty data so they can make personalized gestures, such as offering bonus points for inconvenience or proactive outreach when shipping delays occur.
Optimize Retention Analytics
Data drives your efforts to increase LTV. Track metrics such as repeat purchase rate, churn rate, and active loyalty participation. This is easy with Rivo’s analytics dashboard. You can identify which rewards or campaigns correlate with repeat behavior and where customers drop off. From there, it’s just about reverse engineering your loyalty tactics to drive better analytics.
Build Emotional Connection Through Brand Values
Loyalty grows deeper when customers believe in what your brand stands for. Your product might not be the best, or the cheapest, but if customers feel something when they interact with your brand, that’s really what matters most.
Communicate your values authentically. That could be sustainability, craftsmanship, or community. You might align with certain charities that matter to your core audience. You could even reward engagement that aligns with those values, like recycling packaging.
Final Words on How to Increase Customer Lifetime Value
As we bring our guide on how to increase customer lifetime value to a close, we want to reiterate that the best Shopify brands aren’t necessarily chasing more customers. Instead, they’re getting more from their existing customers. That’s increasing LTV in a nutshell.
Focus your attention on retention, personalization, and consistent value delivery. If you do that, every relationship becomes more profitable over time.
Our blog has additional resources on topics like customer lifetime value vs customer acquisition cost, the average CAC for e-commerce, and a whole lot more. But whether you choose to get started with Shopify referral program, loyalty program, or membership program, Rivo is the platform built for raising LTV.
See how Rivo helps Shopify brands turn loyalty into measurable revenue. Book a demo and start building long-term customer value with Rivo today.
